Construction industry payroll reporting

Proper payroll reporting

BWC bases premiums on wages and exposure to hazard. Therefore, it's critical you report wages within the manual classification(s) in which your employees performed the work. Job orders and hourly segregation (timesheets or job logs) showing labor costs can help you create worksheets to track the reporting of your payroll. Keep these worksheets in the event of an audit. If you do not separate these wages, you must report them to the highest-rated classification assigned.

Construction cap

We provide a salary cap for construction employees. Employees reportable to construction manual classifications are eligible for exemption of weekly wages greater than 150% of the statewide average weekly wage.

You must deduct section 125 cafeteria plan deductions before you calculate the salary cap.

Spread out bonuses paid in the policy year among the weeks worked during the policy year. The total is subject to the weekly construction cap.

The weekly construction cap does not apply to officers of the corporation. The corporate officer minimum/maximum requirement supersedes the weekly construction cap.

It's imperative to keep weekly worksheets and payroll records calculating this excess by week per employee and classification. In the absence of these weekly records, you can only take advantage of the cap on the whole payroll reporting basis.

If an employee's wages are reportable to more than one construction manual, we allocate the construction cap to each classification based on the percent of time worked in that classification for the week.

Weekly construction cap

Payroll period

Payroll limitation cap

July 1, 2019 - June 30, 2020

$1,425 per week

July 1, 2018 - June 30, 2019

$1,398 per week

July 1, 2017 - June 30, 2018

$1,353 per week

July 1, 2016 - June 30, 2017

$1,328 per week

Jan. 1, 2015 - June 30, 2016

$1,293 per week

If an employee's wages are reportable to more than one construction manual, allocate the construction cap to each classification based on the percentage of time worked in that classification for the week. For example, if the weekly cap is $1,398 and the weekly wage is $2,000:

1099s

Use of independent contractors is common in the construction industry and some other industries. They usually receive a 1099 instead of a W-2. Employers do not pay payroll taxes on these workers.

Questions frequently arise about the legal status of a particular worker as an employee or an independent contractor. Where a construction contract is at issue, the "right to control" test is not used as the basis for a determination. BWC must apply the 20 specific factors in ORC 4123.01(A)(1)(c). An Independent Contractor/Employee Questionnaire (UA-2) is available.

It's common practice to use written contracts. It's also common for the general contractors to obtain a copy of and maintain subcontractors' workers' compensation certificates of coverage, liability insurance and invoices and/or bids for the services provided.

Ohio employers have a duty to properly report required information to BWC for proper calculation of premiums. Employers who fail to secure, maintain or properly report required information for workers' compensation coverage may be subject to criminal prosecution.

A primary contractor may be liable for claims filed by employees of sub-contractors when the sub-contractor fails to provide workers' compensation coverage for its employees

Construction or erection estimator

Manual classification 5605 applies only to employees of construction, erection or rigging operations who estimate the cost of jobs outside of an office environment with exposure to field hazards on potential or prospective job sites. Additionally, we classify salespersons that take measurements at potential job sites, commercial or residential, as estimators. Manual 5605 is not available for division of a single employee's payroll with any other classification. This includes clerical (8810), sales (8742) or construction superintendent (5606).

We also allow employers to report project managers, executive supervisors and construction superintendents of construction businesses to a separate classification if he or she meets certain conditions. This classification applies to those who spend time in the office and visit various active job sites conferring with a job superintendent or job foreman. These visits are usually to check progress at each job site or project. To qualify for code 5606, this person must:

Not perform any construction work.

Exercise supervision through job-site supervisor or foreman.

Not have direct charge over the workers at the site.

Manual 5606 is not available for division of a single employee's payroll with any other classification, including clerical (8810), sales (8742) or estimator/bidder (5605). Those employees that engage in both estimating and construction superintendent duties are reportable to the 5606 classification.